Regie National Des Usines Renault SA V. Zhang: Choice of Law in Torts and Another Farewell to Phillips V Eyre but the Voth Test Retained for Forum Non Conveniens in Australia

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CONTENTS  I     Introduction II    Choice of Law         A    The Position before Zhang         B    The Position as a Result of Zhang                1    The Adoption of the Lex Loci in Place of the                     Double Actionability Test                2    Flexible Exceptions                3    Other Matters III   Jurisdiction         A    The Facts in Zhang         B    The Position before Zhang         C    The Position as a Result of Zhang         D    The Application of the Voth Test in Zhang IV    Concluding Observations 

I INTRODUCTION

In beginning his separate judgment in Regie National des Usines Renault SA v Zhang, his Honour, Kirby J, adverted to the depressing descriptions of the subject of private international law as `a dismal swamp' and as `one of the most baffling subjects of legal science.' (1) These descriptions may appear apt in relation to two particular areas of private international law which have given rise to acute difficulties in recent years. The first concerns the rules governing the stay of local proceedings on the ground of the inappropriateness of the local forum (sometimes referred to as forum non conveniens). The second relates to the choice of law rules which govern liability for tortious conduct that occurs outside the law area of the court hearing an action. Both these issues arose for decision by the High Court of Australia in Zhang.

The High Court, both in Zhang and in the preceding case of John Pfeiffer Pty Ltd v Rogerson, (2) has performed the signal service of eliminating much of the uncertainty that has surrounded the choice of law rules for tort. This has been principally achieved by finally rejecting, for Australia, the so-called double actionability test established many years ago in Phillips v Eyre and much litigated since then. (3) The same probably cannot be said about the effect of the High Court's latest pronouncement on the principles which govern a stay of local proceedings on the ground of forum non conveniens.

It is doubtful whether it was strictly necessary for the High Court in Zhang to rule on the relevant rules which govern the application of the substantive law in tort. As was emphasised by Callinan J in his dissenting judgment, the substantive law that applied in the place where the allegedly wrongful act occurred in Zhang was, on any view, a material circumstance in determining whether there should have been a stay of proceedings commenced in the New South Wales Supreme Court. (4) In any event, it was highly desirable and appropriate for the nation's highest court of appeal to clarify what had become the source of almost intolerable confusion surrounding the choice of law rules in tort.

It is convenient to begin with the choice of law rule established in Zhang and defer until later the description of the facts of the case and the explanation of the precise relevance of the rule to those facts.

II CHOICE OF LAW

A The Position before Zhang

Before the High Court decided Breavington v Godleman in 1988, (5) it was commonly assumed that an action for a tort committed outside the law area of the court, whether committed in or outside Australia (intra-national and international torts), had to satisfy the two conditions established in Phillips v Eyre (hence the description of `double actionability'). First, the wrong alleged `had to be of such a character that it would have been actionable if it had been committed' in the forum: that is, the law area of the court in which the action was commenced. Secondly, `the act must not have been justifiable by the law of the place where it was done.' (6) Once those two conditions were satisfied the court of the forum then applied its own law to govern the substantive (and procedural) rights and liabilities of the parties to the action. (7)

Much uncertainty surrounded the meaning of these two conditions, in particular the meaning of the terms `actionable' and `justifiable'. …

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